By this miscellaneous application filed under s. 254(2) of IT Act arising out of order of Tribunal dt. 31st August, 2005 in ITA Nos. 3860 to 3863/Mum/2001, assessee has sought rectification of order of Tribunal on ground that error apparent from record is crept therein. During course of hearing, learned counsel for assessee has invited our attention to fact that assessee is proprietor of M/s Motilal Oswal, proprietary concern which is doing business on Bombay Stock Exchange of buying and selling shares on behalf of various large institutional clients, high net worth individuals and various other parties in return for brokerage which is duly offered for taxation as business income from year to year. That apart, assessee has also invested his personal surplus funds in shares, which are held by him as investments. assessee maintained two separate books of account, one for his proprietary concern and other for his personal account. For year under consideration, profits or losses on sale of shares, held under investment portfolio in his personal account, being capital asset within meaning of s. 2(14) of Act, were duly offered for taxation under head "Capital gains" under s. 45 of IT Act, 1961. Assessments under s. 143(3) for asst. yrs. 1993-94 and 1995-96 were completed accepting aforesaid contention of assessee and accordingly, impugned income was assessed under head "Capital gains". Further, for asst. yr. 1994-95, return was processed under s. 143(1)(a) without any adjustment. In course of assessment proceedings, in respect of asst. yr. 1997-98, AO opined that receipts on transfer of impugned shares held under investment portfolio by assessee constituted business income mainly on following alleged grounds: (i) impugned transactions were carried out regularly and frequently; (ii) quantities purchased/sold were generally large; (iii) Assessee had contact, access to information and necessary qualification and competence to carry out business; (iv) assessee had allegedly borrowed funds. aforesaid view taken by AO regarding assessability of impugned income under head "Profits and gains" from business was clearly divergent from orders passed by his predecessors in respect of asst. yrs. 1993-94 to 1995-96. It is accepted principle that mere change of opinion will not give jurisdiction to AO to reopen completed assessment. However, same was not adhered to by AO. He issued notice under s. 148 on assessee on 30th March, 1998 in respect of asst. yrs. 1993-94 to 1995-96 proposing to reassess income shown under head "Capital gains" as business income. Subsequently, orders under s. 143(3)/148 was passed on 31st March, 2000 in respect of asst. yrs. 1993-94, 1994-95 and 1995-96 to aforesaid effect. On same lines, order under s. 143(3) for asst. yr. 1997- 98 was passed on 31st March, 2000 holding that income shown under head "Capital gains" is assessable under head "Business income." However, in spite of holding as supra, AO did not allow set-off of loss shown under head "Capital gains" now assessed by AO as business income against income from business under s. 70. Being aggrieved with order of AO in respect of aforesaid years, assessee preferred appeal before CIT(A) on following grounds: (a) Challenging reopening of assessment for asst. yrs. 1993-94 to 1995-96 being void ab initio for want of jurisdiction. (b) Challenging reassessment of income shown under head "Capital gains" as income under head "Profits and gains from business or profession." (c) Asst. yr. 1997-98. Challenging assessment of income shown under head "Capital gains" as income chargeable under head "Profits and gains from business or profession". learned CIT(A) after hearing various arguments put forth by assessee and further placing reliance upon order of Delhi Tribunal in case of Arjun Kapur vs. Dy. CIT (2001) 71 TTJ (Del) 810: (1999) 70 ITD 161 (Del) covering identical issue under similar circumstances, held that income arising from sale of shares held by assessee, sharebroker, as investment, was assessable under head "Capital gains". In respect of other grounds challenging reopening of assessment under s. 148 for asst. yrs. 1993-94 to 1995-96, CIT(A) ruled as under: "The next issue common for asst. yrs. 1993-94, 1994-95, 1995-96 is pertaining to reopening of assessment under s. 148. This is now become academic as main ground regarding assessment of capital gains as business income has been decided in favour of appellant. No purpose would be served in deliberating on issue regarding reopening of assessment under s. 148. Accordingly, for statistical purposes, this ground is treated as dismissed." aforesaid order of CIT(A) was contested in appeal before Tribunal by Department. submissions made before CIT(A) by assessee were reiterated before Tribunal. Further more reliance was inter alia placed on judgments of Mumbai Tribunal in cases of (1) Addl. CIT vs. Sundar Iyer (ITA No. 295/Mum/2001) (2) Addl. CIT vs. Ramdeo Agarwal (ITA No. 4912/Mum/2001) rendered in favour of respective assessees under exactly identical circumstances. In spite of clear rulings of co-ordinate Benches in aforesaid cases, Hon ble Tribunal in instant case, had took divergent view in deciding appeals against assessee vide para 7 of impugned order. learned counsel for assessee further submitted that several mistakes have crept in aforesaid order of Tribunal which pertain to fundamentals and are apparent from record inasmuch as same obviously appear from evidences which were already on record before Hon ble Tribunal, but, were omitted to be considered by it. As such, same calls for rectification by way of passing suitable order. learned counsel for assessee further relied upon following orders in support of his contention that whenever certain material evidence are left to be considered by Tribunal while deciding appeal, Order of Tribunal can be rectified either by recalling it or by passing modified order: (i) Nitiraj Properties (P) Ltd. vs. Asstt. CIT [MA No. 255/Mum/2004 arising out of ITA No. 4379/Mum/1997] (ii) Rakesh Ramani vs. ITO [MA No. 267/Mum/2003 arising out of IT(SS)A No. 11/Mum/2003]. learned counsel for assessee further pointed out mistakes apparent which have crept in order of Tribunal. During course of hearing, it was brought to notice of Tribunal that shares held as investments by assessee in personal account were purchased by him out of his own funds and no borrowing was made for purchase of said shares. In support of this contention, assessee has filed copies of capital account and relevant extract of balance sheet of individual case as on 31st March, 1993, 31st March, 1994, 31st March, 1995, 31st March, 1997 which are available at pp. 1 to 8 of paper book filed before Hon ble Tribunal. But these facts were not considered by Tribunal while deciding issue and has opined that investment in shares were made out of borrowed funds. Since Tribunal has not considered correct facts and has decided issue under wrong premise, necessary rectification is required therein. It was also contended before Tribunal that assessee has earned sizable amount of dividends over impugned assessment years which were offered as income from other sources and was accepted as such by Department. capital accounts of assessee for relevant years were available on record before Hon ble Tribunal which clearly substantiate assessee s claim. This however, corroborates assessee s claim that impugned shares were purchased as investments and were got transferred in his name. It was not case of purchase and sale of shares without taking delivery of same, which usually happens in case of dealers in shares. shares have been held by assessee on investment account and at no point of time, were they converted into stock-in-trade. It was also pointed out that sizable number of shares were purchased by assessee during financial year 1991-92 and reflected investments in balance sheet of assessee as on 31st March, 1992 and same were accepted by Department. Further, in respect of asst. yrs. 1993-94 to 1995-96, although assessments were later on reopened illegally under s. 143, treatment of impugned shares as investment was accepted by Department in original assessment. All these facts were available on record before Tribunal in form of paper book, but, were not considered. But not considering material evidence by Tribunal while deciding issue lead to error crept in order of Tribunal. learned counsel for t h e assessee further contended that once assessee held shares in investments and if it were converted into stock-in-trade, provisions of s. 45(2) of IT Act is attracted. But, this aspect was not examined by Tribunal. Unless capital assets are converted by assessee suo motu into stock-in-trade , they retain their character as such and profits arising on transfer thereof, is chargeable to tax under head "Capital gains" and not as "Profits and gains from business". In absence of any such action on part of assessee as specified under s. 45(2) of Act, Department cannot arbitrarily treat capital asset as stock-in-trade, more so when same was assessed as capital asset in year of its acquisition. learned counsel for assessee placed reliance upon judgment of Kerala High Court in case of Asstt. CIT vs. Kethan Kumar A. Shah (2000) 159 CTR (Ker) 284: (2000) 242 ITR 83 (Ker) in which it has been held that profit on sale of certain shares held by assessee, sharebroker, as personal investment, is assessable as capital gains and not as business income when same were not converted by him into stock-in-trade, in absence of any material to show that these shares were acquired in course of assessee s business. Although reliance was placed on said case law at time of hearing of appeal before Tribunal, but, it escaped attention of Tribunal while disposing of appeal. As such, non- consideration of relevant judgments constitutes apparent mistake in order of Tribunal. learned counsel for assessee further invited our attention to order of Tribunal and consolidated order of CIT(A), with submissions that while filing appeal before CIT(A) for asst. yrs. 1993- 94 to 1995-96, assessee has challenged reopening of assessment under s. 148, besides, assailing assessment order on additions. CIT(A) had decided issue on merit following order of his predecessor in case of Sundar Iyer (supra) and order of Tribunal in case of Arjun Kapur vs. Dy. CIT (supra) and held that assessee held shares as investments and profit earned on its transfer forms part of capital gain. other ground through which reopening was challenged was not adjudicated by CIT(A) as it becomes academic in light of decision on main ground. Now, Tribunal had upset order of CIT(A) by holding that profit earned by assessee on transfer of shares is business receipt and is chargeable to tax. issue raised by assessee with regard to validity of reopening of assessments requires to be adjudicated by first appellate authority. best course available with Tribunal while upsetting order of CIT(A) is, that to restore matter back to file of CIT(A) with direction to adjudicate issue of reopening assessment instead of restoring order of AO. But, Tribunal did not do same and has straightaway set aside order of CIT(A) and restore that of AO. By doing so, Tribunal has shut door for assessee to get adjudication on point of validity for reopening of assessment and this action of Tribunal resulted into error apparent from record which requires rectification. learned counsel for assessee further contended that it has quoted various judgments before Tribunal, but, they were not properly considered by Tribunal and Tribunal has decided issue without considering relevant material available on record. learned counsel for assessee further placed reliance upon following judgments in support of his plea that omission or non-consideration of relevant evidence available on records, leads to error crept in order of Tribunal. CIT vs. Madan Gopal Radhey Lal (1969) 73 ITR 652 (SC); CIT vs. Principal Officer, Laxmi Surgical (P) Ltd. (1994) 116 CTR (Bom) 238: (1993) 202 ITR 601 (Bom); Dy. CIT vs. Reliance Industries Ltd. (2004) 82 TTJ (Mumbai)(SB) 765: (2005) 273 ITR 16 (Mumbai)(SB)(AT); Dy. CIT vs. Mangalam Cement Ltd. (2005) 92 TTJ (Jp)(TM) 1: (2005) 92 ITD 44 (Jp)(TM); CIT vs. Travancore Titanium Products Ltd. (2003) 183 CTR (Ker) 473: (2004) 265 ITR 526 (Ker); CIT vs. ITAT (1988) 72 CTR (MP) 134: (1988) 172 ITR 158 (MP); CIT vs. ITAT (1988) 72 CTR (MP) 134: (1988) 172 ITR 158 (MP); CIT vs. Madan & Co. (2002) 174 CTR (Mad) 172: (2002) 254 ITR 445 (Mad); CIT vs. ITAT (1979) 12 CTR (Ker) 303: (1979) 120 ITR 231 (Ker). learned Departmental Representative, on other hand, has submitted that Tribunal has adjudicated impugned issue in light of material available on record and has given specific finding thereon. Since Tribunal has adjudicated issue keeping in view of all relevant evidence and judgments referred to by parties, its decision cannot be reviewed under garb of rectification as review of order of Tribunal is not permissible under s. 254(2) of IT Act. Having carefully examined order of Tribunal vis-a-vis miscellaneous application, we find that though Tribunal has tried to consider material evidence, but, some of important materials and facts were not taken into account while disposing of appeal. Tribunal while disposing of appeal, was swayed with arguments of Revenue that assessee cannot be called to have two set of minds and at one point of time is, one set of mind is involved in trading in shares and other making investments in shares without looking into judgment of Kerala High Court in case of Kethan Kumar A. Shah (supra), though referred during course of hearing of appeal, in which it has been held that profit on sale of certain shares held by assessee, sharebroker, as personal investment, is assessable as capital gain and not as business income when same were not converted by him into stock-in-trade in absence of any material to show that these shares were acquired in course of assessee s business. It was also not taken into account by Tribunal that assessee has made investment in shares during financial year 1991-92 and are reflected as investment in balance sheet of assessee as on 31st March, 1992 and same was accepted as such by Revenue. Tribunal has also not given weightage to fact that, for asst. yrs. 1993-94 to 1995-96, assessee has shown investment in shares and same was accepted by Revenue and later on assessment was reopened by AO by issuing notice under s. 148, of which, validity was challenged, but, was not decided by CIT(A). Tribunal has decided issue on basis of frequency of transactions without examining source of funds which were invested in shares. issue regarding validity of reopening of assessment raised by assessee before CIT(A) remained to be adjudicated while setting aside order of CIT(A) on merit. Tribunal ought to have send matter back to CIT(A) to adjudicate issue regarding validity of reopening of assessment as it was not adjudicated by him on premise that relief was given on merit. But, Tribunal has outrightly set aside order of CIT(A) and restore that of AO confirming additions made by him without having adjudicated issue of validity of reopening of assessment. To our mind, this action of Tribunal leads to mistake crept in order of Tribunal which is apparent from record. We have also carefully examined contentions of assessee on other points and we find that Tribunal has not examined aspect of applicability of provisions of s. 45(2) of IT Act when investment shown in shares were converted in stock-in-trade. Tribunal has also not taken into account while disposing of appeal that in financial year 1991- 92, assessee has purchased sizable number of shares and were reflected as investment in balance sheet as on 31st March, 1992 which was accepted by Department in that assessment year. Once, Revenue has accepted method of accounting in earlier years, it cannot be rejected in subsequent assessment years without bringing contrary on record. We have also carefully examined orders of Tribunal referred to by assessee in which under identical circumstances, investment in shares were treated to be investment and on its transfer capital gain was worked out. But, Tribunal did not take much cognizance of these judgments of Tribunal. judgment of Kerala High Court in case of Kethan Kumar A. Shah (supra) was also not properly taken into account by Tribunal while disposing of appeal. We have also examined various judgments referred to by assessee with regard to scope of s. 254(2) of IT Act and from its reading we find that order of Tribunal can be rectified or recalled when it is noticed that certain important judgments or relevant evidence were not considered by Tribunal while disposing of appeal. Turning to case in hand, it is noticed that, material evidence and important judgments referred to by assessee, escaped attention of Tribunal while disposing of appeal which lead to mistake crept in order of Tribunal. We, therefore, of view that impugned issue requires fresh adjudication by Tribunal in light of evidence and judgments referred to by assessee. We, therefore, recall our order dt. 31st Aug., 2005 and direct Registry to refix appeal for hearing in regular course for hearing. In result, miscellaneous application of assessee is allowed. *** MOTILAL OSWAL v. ADDITIONAL COMMISSIONER OF INCOME TAX