only issue involved in this appeal is whether or not assessee has n option to claim depreciation allowance while computing deduction under s. 80-IA of IT Act, 1961, in case where assessee has not claimed depreciation in books of account. This issue is squarely covered by Tribunal s decision in case of Plastiblends India Ltd. vs. ITO (2005) 95 TTJ (Mumbai) 1062: (2005) 94 ITD 295 (Mumbai) in favour of assessee. Learned Departmental Representative, however, contends that Tribunal has subsequently taken view in favour of Revenue, and urges us to follow same. Our attention is invited to Tribunal s decision in case of Prince SWR Systems (P) Ltd. vs. Dy. CIT (ITA No. 2811/Mum/2004, dt. 10th Sept., 2004), and to Tribunal s decision in case of ITO vs. Venus Jewels (ITA No. 3842/Mum/2001, dt. 25th Oct., 2004). We have heard rival contentions, perused material on record and duly considered factual matrix of case as also applicable legal position. As far as Tribunal s decision in case of Prince SWR Systems (P) Ltd. (supra) is concerned, we have noted that Tribunal has not followed co- ordinate Bench decision in Plastiblends India Ltd. s case (supra), and has decided case against assessee by following Bombay High Court judgment in case of Indian Rayon Corpn. Ltd. vs. CIT (2003) 182 CTR (Bom) 247: (2003) 261 ITR 98 (Bom). What is missed out, however, is fact that in Plastiblends India Ltd. s case (supra), co-ordinate Bench had duly considered Indian Rayon Corpn. Ltd. s case (supra) and then came to conclusion that Indian Rayon Corpn. Ltd. s case (supra) decision has no bearing on question before Tribunal. Once 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 Hon ble Supreme Court in case of Union of India vs. Paras Laminates (P) Ltd. (1990) 87 CTR (SC) 180. To that extent, Tribunal s decision in case of Prince SWR Systems (P) Ltd. (supra) appears to be in our humble understanding, per incuriam. In case of Paras Laminates (P) Ltd. (supra), Hon ble Supreme Court has, inter alia, observed as follows: "It is true that Bench of two Members must not lightly disregard decision of another Bench of same Tribunal on identical question. This is particularly true when earlier decision is rendered by larger Bench. rationale of this rule is need for continuity, certainty and predictability in administration of justice. Persons affected by decisions of Tribunals or Courts have right to expect that those exercising judicial functions will follow reason or ground of judicial decision in earlier cases on identical matters. Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency would shake public confidence in administration of justice. It is, however, equally true that it is vital to administration of justice that those exercising judicial power must have necessary freedom to doubt correctness of earlier decision if and when subsequent proceedings bring to light what is perceived by them as erroneous decision in earlier case. In such circumstances, it is but natural and reasonable and indeed efficacious that case is referred to larger Bench." In case of Venus Jewels (supra), co-ordinate Bench held issue in favour of Revenue on basis of Hon ble Bombay High Court s judgment in case of Indian Rayon Corpn. Ltd. (supra) and on basis of Hon ble Rajasthan High Court s judgment in case of Vijay Industries vs. CIT (2004) 190 CTR (Raj) 90: (2004) 270 ITR 175 (Raj). What is held in Vijay Industries case (supra) is same thing as held in Indian Rayon Corpn. Ltd. s case (supra) but then Plastiblends India Ltd. s case (supra) having considered school of thought emerging from these materially similar decisions, has come to conclusion that where assessee has not claimed depreciation in its books of account, same cannot be thrust upon assessee for purpose of computing deduction under s. 80-IA. Following Hon ble Supreme Court s judgment in Paras Laminates (P) Ltd. s case (supra) it was not open to Bench to take any other view of matter than view taken by co- ordinate Bench. decision in Venus Jewels case (supra) also appears to be per incurium. per incurium. No doubt that when co-ordinate Bench doubts correctness of decision of another co-ordinate Bench, reference can be made to Hon ble President for constitution of larger Bench. However, as far as issue before us is concerned, request for constitution of larger Bench was already been turned down. We see no necessity to make yet another request considering that Hon ble President has, in considered decision, turned down earlier request to that effect. In our opinion, issue does not call for reconsideration at this stage. As to what should be binding effect of per incurium decision, we can do no better than to quote Hon ble Andhra High Court in case of CIT vs. B.R. Constructions (1993) 113 CTR (AP)(FB) 1: (1993) 202 ITR 222 (AP)(FB). In his inimitable style, Justice S.S.M. Quadri (as he then was) has articulated views of Full Bench of Hon ble Andhra Pradesh High Court as follows: "In country like ours which is governed by rule of law, law has to be certain and uniform which is fundamental to rule of law. In Mamleshwar vs. Kanahaiya Lal AIR 1975 SC 907, Krishna Iyer, J., speaking for Supreme Court, observed: Certainty of law, consistency of rulings and comity of Courts all flowering from same principle, converge to conclusion that decision once rendered must later bind like cases. In this concurring judgment in State of U.P. vs. Synthetics & Chemicals Ltd. (1991) 4 SCC 139, 163, observation of Sahai, J. on this aspect is: Uniformity and consistency are core of judicial discipline. That is why doctrine of stare decisis is part of our judicial system. This doctrine means to abide by former precedents . Blackstone elucidated doctrine thus: For it is established rule to abide by former precedents, where same points come again in litigation: as well as to keep scale of justice even and steady and not liable to waiver with every new Judge s opinion, as also because law in that case being solemnly declared and determined, what before was uncertain, and perhaps indifferent, is now become permanent rule, which it is not in breast of any subsequent Judge to alter or vary from, according to his private sentiment. . . . ratio decidendi of judgment is binding precedent. hierarchy of authority with regard to binding precedent is summed up in para 28 at p. 158 of Salmond on Jurisprudence , Twelfth Edition, as follows: general rule is that Court is bound by decision of all Courts higher than itself. High Court Judge cannot question decision of Court of Appeal, nor can Court of Appeal refuse to follow judgments of House of Lords. corollary of rule is that Courts are bound only by decisions of higher Courts and not by those of lower or equal rank. High Court Judge is not bound by previous High Court decision, though he will normally follow it on principle of judicial comity, in order to avoid conflict of authority and to secure certainty and uniformity in administration of justice. If he refuses to follow it, he cannot overrule it; both decisions stand and resulting antimony must wait for higher Court to settle. principles applicable to Courts in India were laid down by Subba Rao, J. (as he then was) in Dr. K.C. Nambiar vs. State of Madras AIR 1953 Mad 351, which were approved by Full Bench of our High Court in Subbarayudu vs. State AIR 1955 AP 87 (FB): (1955) 11 ALT (Cri.) 53. They are as follows: single Judge is bound by decision of Division Bench exercising appellate jurisdiction. If there is conflict of Bench decisions, he should refer case to Bench of two Judges who may refer it to Full Bench. single Judge cannot differ from Division Bench unless Full Bench or Supreme Court overruled that decision specifically or laid down different law on same point. But he cannot ignore Bench decision, as I am asked to do on ground that some observations of Supreme Court made in different context might indicate different line of reasoning. Division Bench must ordinarily respect another Divisional Bench of co-ordinate jurisdiction but if it differs, case should be referred to Full Bench. This procedure would avoid unnecessary conflict and confusion that otherwise would prevail. effect of binding precedents in India is that decisions of Supreme Court are binding on all Courts. Indeed, Art. 141 of Constitution embodies rule of precedent. All subordinate Courts are bound by judgments of High Court. single Judge of High Court is bound by judgment of another single Judge and fortiori judgments of Benches consisting of more Judges than one. So also, Division Bench of High Court is bound by judgments of another Division Bench and Full. single Judge or Benches of High Courts cannot differ from earlier judgments of co-ordinate jurisdiction merely because they hold different view on question of law for reason that certainty and uniformity in administration of justice are of paramount importance. But, if earlier judgment is erroneous or adherence to rule of precedents results in manifest injustice, differing from earlier judgment will be permissible. When Division Bench differs from judgment of another Division Bench, it has to refer case to Full Bench. single Judge cannot differ from decision of Division Bench except when that decision or judgment relied upon in that decision is overruled by Full Bench or Supreme Court, or when law laid down by Full Bench or Supreme Court is inconsistent with decision. It may be noticed that precedent ceases to be binding precedent: (i) if it is reversed or overruled by higher Court, (ii) when it is affirmed or reversed on different ground, (iii) when it is inconsistent with earlier decisions of same rank, (iv) when it is sub silentio, and (v) when it is rendered per incuriam. In para 578 at p. 297 of Halsbury s Laws of England, Fourth Edition, rule of per incuriam is stated as follows: decision is given per incuriam when Court has acted in ignorance of previous decision of its own or of Court of co-ordinate jurisdiction which covered case before it, in which case it must be decided which case to follow; or when it has acted in ignorance of House of Lords decision, in which case it must follow that decision; or when decision is given in ignorance of terms of statute or rule having statutory force. In Punjab Land Development & Reclamation Corpn. Ltd. vs. Presiding Officer, Labour Court (1990) 3 SCC 682: (1990) 77 FJR 17 (SC), Supreme Court explained expression per incuriam thus: Latin expression per incuriam means through inadvertence. decision can be said generally to be given per incuriam when Supreme Court has acted in ignorance of previous decision of its own or when High Court has acted in ignorance of decision of Supreme Court. As has been noticed above, judgment can be said to be per incuriam if it is rendered in ignorance or forgetfulness of provisions of statute or rule having statutory force or binding authority. But, if provision of Act was noticed and considered before conclusion arrived at, on ground that it has erroneously reached conclusion judgment cannot be ignored as being per incuriam. In Salmond on Jurisprudence, Twelfth Edition, at p. 151, rule is stated as follows: mere fact that (as is contended) earlier Court misconstrued statute, or ignored rule of construction, is no ground for impugning authority of precedent. precedent on construction of statute is as much binding as any other, and fact that it was mistaken in its reasoning does not destroy its binding force. In Choudhry Bros. vs. CIT (1987) 60 CTR (AP) 151: (1986) 158 ITR 224 (AP), as noticed above, Division Bench treated judgment in Ch. Atchaiah vs. ITO (1979) 116 ITR 675 (AP), as per incuriam on ground that earlier Division Bench did not notice significant changes charging s. 3 has undergone by omission of words or partners of firm or members of association individually . In our view, this cannot be ground to treat earlier judgment as per incuriam. change in provisions of Act was present in mind of Court which decided Ch. Atchaiah s case (supra). Merely because conclusion arrived at on construing provisions of charging section under old Act as well as under new Act did not have concurrence of latter Bench, earlier judgment cannot be called per incuriam. Though judgment rendered per incuriam can be ignored even by lower Court, yet it appears that such course of action was not approved by House of Lords in Cassell & Co. Ltd. vs. Broome (1972) 1 All ER 801, wherein House of Lords disapproved judgment of Court of Appeal treating earlier judgment of House of Lords as per incurium. Lord Hailsham observed: It is not open to Court of Appeal to give gratuitous advice to Judges of first instance to ignore decisions of House of Lords in this way . It is recognised that rule of per incuriam is of limited application and will be applicable only in rarest of rare cases. Therefore, when learned single Judge or Division Bench doubts correctness of otherwise binding precedent, appropriate course would be to refer case to Division Bench or Full Bench, as case may be, for authoritative pronouncement on question involved as indicated above. abovesaid two questions are answered as indicated above." It is thus beyond dispute that decision which is per incuriam is not binding judicial precedent. It is also well-settled that when it is not open to High Court Bench to differ from decision of Bench of equal strength, it cannot also be open to Bench of this Tribunal to differ from view taken by co- ordinate Bench of equal strength. only option in case one doubts correctness of such decision is to refer matter for constitution of larger Bench. decision ignoring this rule of precedent, which is duly approved by Hon ble Courts from time to time, cannot but be viewed as per incuriam. Therefore, following Hon ble Andhra Pradesh High Court Full Bench decision in case of B.R. Constructions (supra), such decision of co-ordinate Bench has no precedence value. For reasons aforesaid, we are of considered view that, what appear to be per incuriam decisions, orders passed by co-ordinate Benches in cases of Prince SWR Systems (P) Ltd. vs. Dy. CIT (ITA No. 2811/Mum/2004, dt. 10th Sept., 2004) and to Tribunal s decision in case of ITO vs. Venus Jewels (ITA No. 3842/Mum/2001, dt. 25th Oct., 2004) do not constitute binding judicial precedents. Accordingly, following Hon ble Andhra Pradesh Full Bench judgment in case of B.R. Constructions (supra), we decline to be guided by same. In any case, larger Bench request has already been turned down, and, accordingly, only option open to us is to follow co-ordinate Bench decision in case of Plastiblends India Ltd. (supra). We do so. Accordingly, we hold that it is not open to AO to thrust depreciation allowance while computing deduction under s. 80-IA of IT Act, 1961, in case where assessee has not claimed depreciation in books of account. assessee gets relief accordingly. In result, appeal is allowed. *** J.K.T. FABRICS (P) LTD. v. DEPUTY COMMISSIONER OF INCOME TAX