IN INCOME TAX APPELLATE TRIBUNAL J Bench, Mumbai Before S/Shri B.R. Baskaran (AM) & Sanjay Garg (JM) M.A. No. 295/Mum/2014 arising out of I.T.A. No. 352/Mum/2008 (Assessment Year 2004-05) M.A. No. 296/Mum/2014 arising out of I.T.A. No. 577/Mum/2008 (Assessment Year 2004-05) M/s. Sanghvi Jewellery ITO Ward 8(3)(1) Manufacturing Co. Pvt. Ltd. Vs. Room No. 201 G-41, Gem & Jewellery Aayakar Bhavan Complex-III M.K. Road SEEPZ, SEZ, Andheri (East) Churchgate Mumbai-400 096. Mumbai-400 020. (Appellant) (Respondent) PAN No.AAACS7836B Assessee by Shri B.V. Jhaveri Department by Shri Sumit Kumar Date of Hearing 5.2.2016 Date of Pronouncement 13 .5.2016 ORDER Per B.R. Baskaran, AM :- assessee has filed these miscellaneous applications seeking recall of order dated 30-11-2011 passed by Tribunal for assessment year 2004- 05 in cross appeals filed by parties on ground that there is mistake apparent from record and same requires rectification. 2. facts in brief are that assessee is engaged in business of manufacturing and export of diamond studded jewellery and its undertaking is located at SEEPZ, Mumbai. Hence it is eligible to claim deduction u/s 10A of Act. Accordingly, it filed return of income for AY 2004-05 declaring NIL income after claiming deduction u/s 10A of Act. AO noticed that gross profit margin shown by assessee was higher during year under 2 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. consideration and hence assessing officer examined reasons there for. assessing officer noticed that average purchase price of diamonds has come down during year. He further noticed that, during year under consideration, about 50% of total purchases have been made from its sister concern. On further analysis, it was noticed that average purchase price of diamonds purchased from sister concern was Rs.3,445/- per carat, as against overall average purchase price of Rs.4,193/- per carat. Hence AO took view that assessee has inflated Gross profit by reducing price of diamonds purchased from its sister concern. assessee had declared G.P rate at 16.80%. In view of above discussed reasons, assessing officer reduced gross profit margin to 10% of total sales and correspondingly reduced deduction allowable u/s 10A of Act. In view of above, deduction allowed u/s 10A has gone down by Rs.4,98,18,823/-. It is pertinent to note that above discussed adjustment was effected only for purpose of computing eligible deduction u/s 10A of Act in terms of sec. 10A(7) r.w.s. 80IA(10) of Act. AO further noticed that labour charges booked by assessee during year under consideration were also lower than that accounted for in immediately preceding year, i.e, labour charges booked for year was Rs.15.00 lakhs and in immediately preceding year, labour charges were incurred to tune of Rs.73.00 lakhs. It was also seen that in succeeding year, labour charges has gone to Rs.75.00 lakhs. Hence AO took view that assessee has reduced labour expenditure also during year under consideration with objective of increasing profit. Hence assessing officer estimated labour charges at Rs.75.00 lakhs and accordingly further reduced deduction u/s 10A by Rs.60.00 lakhs (Rs.75 lakhs (-) Rs.15.00 lakhs). Thus, assessing officer reduced deduction allowable u/s 10A to tune of Rs.5,58,18,823/- (Rs.4,98,18,832/- + Rs.60,00,000/-). 3. In appellate proceedings, Ld CIT(A) compared average purchase price of diamonds purchased from sister concern with purchase 3 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. rate of similar quality diamonds purchased from non-related concerns. Ld CIT(A) noticed that average purchase price of diamonds purchased from sister concern was lower by Rs.72/- per carat only. Accordingly, Ld CIT(A) held that adjustment could be made to extent of Rs.72/- per carat and accordingly held that deduction u/s 10A claimed by assessee should be reduced by Rs.41,72,623/- only. In respect of labour charges, Ld CIT(A) noticed that expenses booked under another head employee cost has increased during year. Accordingly Ld CIT(A0) opined that reduction in labour charges is offset by expenses booked as employee cost . Hence Ld CIT(A) restricted disallowance made out of labour charges to Rs.20.00 lakhs. Accordingly, first appellate authority restricted adjustments to sec. 10A deduction to Rs.61,72,623/-. 4. Both parties preferred appeal before ITAT and Tribunal restored addition of Rs.4,98,18,823/- pertaining to under pricing of purchase of diamonds. In respect of labour charges, Tribunal estimated adjustments to Rs.40.00 lakhs (as against Rs.60.00 lakhs made by AO and Rs.20.00 lakhs made by Ld CIT(A)). This miscellaneous petition has been filed with plea that theare mistakes apparent from record in order passed by Tribunal. 5. Ld Counsel appearing for assessee submitted that assessee has purchased different sizes of diamonds from both sister concerns and unrelated parties throughout year, which is evidenced by invoices available with assessee as well as in paper book. However, Tribunal has observed that diamonds purchased from sister concern (M/s Sanghavi Exports) was larger in size than that purchased from unrelated persons and hence average purchase rate should have been higher in case of purchases made from sister concern. Ld Counsel submitted that Tribunal has given above said finding by considering only one invoice placed at pages 105A and 105B of paper book. Tribunal has 4 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. overlooked other invoices placed on record and non-consideration of those documents has resulted in error apparent from record. 6. Ld A.R further submitted that Tribunal has referred to financial statements of Sister Concern and observed that average selling rate of diamonds on sales effected by sister concern was Rs.7,310/- per carat. Since average selling rate of diamonds supplied to assessee herein was Rs.3,445/- per carat, it has expressed view that selling rate of products supplied to assessee was lower. Ld A.R submitted that sister concern has sold various kinds of diamonds (different in quality and size) to outsiders as well as to assessee herein. He submitted that selling rate would depend upon quality and size and it has ranged from Rs.1000/- per carat to Rs.1.00 lakh per carat. Further turnover of sister concern was Rs.502.74 crores out of which, sales made to assessee was only Rs.19.97 crores, i.e., about 4% of total sales. Accordingly he submitted that comparison of average selling price of sales effected for whole year with average selling price of goods sold to assessee without considering size and quality of diamonds was not correct and would give misleading result. He further submitted that Tribunal itself has agreed to this fact and, in fact, made specific observation that price per carat of diamond would depend upon quality (colour, cut and clarity) and size of diamonds (carat). Despite this reality, Tribunal has observed as under:- average rate of sales in case of M/s Sanghavi Exports is Rs.7310/-, whereas, average sales rate per carat to assessee was only Rs.3,445/-. authorities will, therefore, be justified in working out shifting of profit from M/s Sanghavi Exports to assess at average sales rate of that concern. There is thus rate difference of about Rs.3,865/- per carat on sales made to assessee. total purchases from M/s Sanghavi Exports was Rs.57953.10 carat of diamonds and, therefore, profit transferred from M/s Sanghavi Exports to assessee would be 3865 x 57953.10 which comes to about Rs.22.39 crores. Ld A.R submitted that above said observations clearly show that Tribunal has failed to follow its own observations and further reduction made by AO was only Rs.4.98 crores, whereas Tribunal is arriving at 5 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. figure of Rs.22.39 crores. workings made by Tribunal shows that their computation is patently wrong. 7. Ld A.R further submitted that assessee has furnished complete details of purchases of diamonds (quality wise as well as price wise) made from sister concerns as well as from outsiders at pages 187 to 201 of paper book. However, Tribunal did not consider these documents at all instead observed that claim of lower quality diamonds had been purchased is not supported by any evidence is incorrect and contrary to facts available on record. non-consideration of these details, which are very much vital to issue under appeal, has resulted in mistake apparent from record. 8. Ld A.R further submitted that assessee has explained that profit margin has gone up due to change effected in product mix, i.e., more number of high profit items were sold during year. Tribunal however did not accept said explanation and held that change in product mix would not have any impact on Gross profit margin. However, Tribunal itself had observed that profit margin would be higher in case of specialised items such as necklace, bangles etc. Thus, Tribunal has not followed its own reasoning while appreciating contentions of assessee and same has resulted in mistake apparent from record. 9. Ld A.R further submitted that assessee has proved that purchase rate of purchases made from sister concern was higher than rate given by unrelated concerns by furnishing details at pages 188- 189 of paper book. However, Tribunal did not consider those details and same has resulted in mistake apparent from record. In this regard, Ld A.R furnished following explanations:- Explanation of mistake: In this respect your honours' kind attention is invited to following chart which is prepared from details referred to hereinabove by Hon'ble Appellate Tribunal (pages 186 to 205): 6 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. Particulars of Sanghavi Dhaval Super of quality Exports exports Diam D Cut OW/N 2481- 3591- 3914 D Cut OWLB 1780- 8289 -10591 D Cut OWLB/N 2255 - 3085 - 4052 D Cut OWLC 14883 3822 - 4144 4370- D Cut W/N 2876 - 2855 -4375 D Cut White 12554 3165 - 20722 F Cut OW/P 19788 6284-9614 8289 F Cut OWLB/P 4519 - 7598 -8749 F Cut OWLB/T 9476 2350-8188 6447 F Cut W/P 2024- 5664-8289 F Cut W/T 13906 1488-6998 3453 -4144 1750- S Cut TTLB 1415 - 1381-1934 3500 1750 S Cut White 1257 - 2486 - 3454 - Total diamonds in 6449 40,783 5,824 Cts. 1,806 Cts. incts. Cts. cts. Cts. From aforesaid chart, it is clear that in respect of each grade (quality) of diamonds purchased by assessee company both from M/s. Sanghavi Exports and M/s. Dhaval Exports, there is variation of prices which is only because of size of diamonds in said grade. For example, on page 203/204 of Paper Book it will be seen that assessee had purchased F Cut W/T diamonds from M/s. Dhaval Exports at price ranging between Rs.2,763/- per carat and Rs.6,216/- per carat. On going through details of this grade of diamonds purchased from M/s. Dhaval Exports (See page 203/204) it will be seen that when there were 60 diamonds per carat assessee had paid Rs.2,763/- per carat but if number of diamonds per carat reduced to 50, rate per carat had increased to Rs.4,697/- per carat. As number of pieces further reduced to 40 per carat rate per carat of same quality of diamonds increased to Rs.6,216/- per carat. However, quality of diamonds was same viz., F Cut W/T. said quality of diamonds, viz., F Cut W/T, were purchased by assessee from M/s. Sanghavi Exports, details of which are at pages 194 and 195 of Paper Book. Secondly, Hon. Tribunal has accepted that diamond prices are heavily influenced by size of diamonds, and therefore, steep variation in same grade of diamonds is obvious and proves bona fides of assessee. Therefore, aforesaid evidence, which is on record, proves case of assessee that it had purchased diamonds 7 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. from M/ Sanghavi exports at prevailing market prices or at price which is comparable with price paid to M/s Dhaval Exports and M/s Super Diam. Ld A.R submitted that Tribunal has overlooked evidences and information available on record and same has resulted in mistakes apparent from record in order of Tribunal. 10. Ld A.R further submitted that average purchase prices worked out by assessing officer was not correct, i.e., assessing officer has actually computed average consumption cost, instead of computing average purchase price. mistake committed by assessing officer was pointed out to Ld CIT(A) and first appellate authority has accepted same and discussed details there of in page no.9 of his order. However, Tribunal did not consider these mistakes committed by assessing officer, even though it was pointed out. Non-consideration of these apparent clerical mistakes has resulted in mistake apparent from record. 11. Ld A.R further submitted that Ld CIT(A) has compared purchase rate of similar quality diamonds between purchases made from sister concern and non-related concerns and accordingly came to conclusion that there was difference of Rs.72/- per carat. He submitted that Tribunal did not consider these specific details analysed by Ld CIT(A), but proceeded to uphold computations made by assessing officer without pointing out as to how workings made by Ld CIT(A) was wrong. Hence, non-consideration of specific details has resulted in mistake apparent from record. 12. With regard to labour charges, Ld A.R submitted that assessee has furnished month wise details of labourers and employees employed by assessee and has shown that number of employees has gone up every month. However, Tribunal did not consider those details. Further, assessee also furnished business details of sister concerns 8 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. and proved that there is no scope for shifting of labour cost to other sister concerns. However, Tribunal failed to consider those specific submissions also. Hence non-consideration of details and submissions has resulted in mistake apparent from record. He further submitted that ratio of average labour cost of sister concerns to their respect sales was consistent in past year and hence there was no scope to take view that labour cost has been shifted. explanations furnished in this regard are extracted below:- other associate concern which is in business of manufacturing and export of diamond studded gold jewellery is Sanghavi Exports. financials of Sanghavi Exports of sales, employee cost and labour charges is as under: (Rs in lakhs) Asst. Year Asst. Year 2003-04 2004-05 Sales Jewellery Activity 2,678.09 3,195.70 Employee Cost Jewellery Activity 246.37 317.66 Labour Charges Jewellery Activity 7.85 8.32 Total Labour Cost 254.22 325.98 Total Labour Cost % to sales 9.49 10.20 It can be thus seen that total labour charges are more or less same in this company. There is no significant change in level of expenses. This company also enjoys benefit u/s 10A and hence profit is exempt. Hence no benefit would accrued to this unit by transferring wages and labour charges." He submitted that Tribunal did not consider these specific details and non- consideration of same has resulted in mistake apparent from record. 13. Ld A.R further submitted that assessing officer has estimated gross profit by adopting rate of 10% on sales. He submitted that gross profit is arrived at after deducting labour cost and hence separate addition confirmed by Tribunal would result in double addition of same item. tribunal has failed to consider these arguments and same resulted in mistake apparent from record. 9 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. 14. Ld. A.R placed his reliance on following case law to contend that non-consideration or oversight of materials available on record will amount to mistake apparent from record:- a. CIT Vs. Mithalal Ashok Kumar (158 ITR 755)(MP) b. Shree Kismat Stone Supplying Co. Vs. ITO (M.A.No.64/Mum/2010 arising out of ITA No.221/Mum/2008) c. Rakesh Ramani Vs. ITO (2006)(5 SOT 547)(Mum) d. Golden Meadows Properties Pvt Ltd Vs. ITO (149 Taxman 17)(Mum) e. Udhavdas Kewalram Vs. CIT (66 ITR 462)(SC) f. Champa Lal Chopra Vs. State of Rajasthan (257 ITR 74) g. Honda Siel Power Products Ltd Vs. CIT (295 ITR 466)(SC) Accordingly, Ld A.R prayed that order passed by Tribunal suffers from various mistakes apparent from record and accordingly prayed that Tribunal be pleased to recall impugned order. 15. On contrary, Ld D.R submitted that Tribunal has passed impugned order by considering all submissions made by both parties and accordingly submitted that order of Tribunal does not suffer from any mistake apparent from record. Ld D.R further submitted that Tribunal is not entitled to review its order u/s 254(2) of Act. In support of his contentions, Ld D.R placed his reliance on following case law:- (a) Naresh K Pahuja Vs. ITAT (2015)(54 taxmann.com 258)(Bom) (b) CIT Vs. Earnest Exports Ltd (2010)(8 taxmann.com 302)(Bom) (c) Indrakumar Patodia Vs. ITO (2011)(13 taxmann.com 7)(Bom) Accordingly he submitted that recall of order would lead to review of decision taken by Tribunal, which is not permitted u/s 254(2) of Act. 16. We have heard rival contentions and perused record. Before proceeding further, we would like to dwell upon views expressed by Hon ble High Courts and Tribunals on scope of provisions of section 254(2) of 10 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. Act. It is well settled proposition of law that Tribunal is empowered only to rectify any mistake from record. It is also settled that Tribunal, under garb of rectification, is not entitled to review its order. question- what constitute mistake apparent from record was always matter of dispute. We noticed that issue was considered in Third Member case of ITAT in case of Puransingh M. Verma Vs. ITO (2001) 78 ITD 277 (Ahd)(TM). Hon'ble Third Member of Bench has considered principles surrounding above said issue. For sake of convenience we extract below relevant observations made by Hon'ble Third Member :- 19. In case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC), their Lordships of Supreme Court had occasion to consider meaning of 'mistake apparent on record'. Their Lordships held that mistake apparent on record must be obvious and patent mistake and not something which can be established by long-drawn process of reasoning on points on which there may be conceivably two opinions. decision on debatable point of law is not mistake apparent from record. 20. In case of Mithalal Ashok Kumar (supra), their Lordships of Madhya Pradesh High Court held as under :-- "Though Appellate Tribunal has no power to review its own order, yet it can certainly correct its mistakes by rectifying same in case it is brought to its notice that material which was already on record before deciding appeal on merits was not considered by it. Therefore, what would be effect of rectifying mistake and thereby amending its original order would always depend on facts of each case. mistakes have not to be strictly considered according to provisions of Order 47, rule 1, Civil Procedure Code, 1908, but have got to be taken into consideration depending on facts of each case which may vary as also points involved." 21. In case of ITO v. ITAT [1965] 58 ITR 634 (All.), it was held by Allahabad High Court that wherein judgment or order of Tribunal error has crept in, not as result of any fault of assessee, but attributable entirely to Tribunal in having lost sight of material fact at time of writing its order or judgment, which fact was duly brought to its notice by assessee, there would be error apparent from record which could be rectified. 22. meaning of words "mistake apparent from record" - As per Chambers Concise Dictionary 'mistake' means to think or understand wrongly, to take for another thing or person, to be wrong about. It also means omission made not by design but by mischance. word 'apparent' refers to something which is obvious, conspicuous and self-evident. Thus 'mistake apparent from records' 11 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. would mean mistakes or errors which are glaring and obvious and not such errors which can be determined by arguments or debate. 23. On analysis of aforementioned decisions, following principles emerge :-- (1) That power of Tribunal under section 254(2) is confined to rectifying any mistake apparent from record. (2) That Tribunal does not have inherent power of rectification or review or revision. Unless there is mistake apparent from record in sense of patent, obvious, clear error or mistake, Tribunal cannot recall its previous order. (3) If error or mistake is one which could be established only by long-drawn arguments or by way of process of investigation and research, it is not mistake apparent from record. (4) Unless there are manifest errors which arc obvious, clear and self- evident, Tribunal cannot recall its previous order in attempt to re- write same. (5) Failure of Tribunal to consider argument advanced by either party for arriving at conclusion is not error apparent on record, although it may be error of judgment. (6) Tribunal cannot in exercise of its power of rectification look into some other circumstances which would support or not support its conclusion. Tribunal cannot re-decide matter and it has no power to review its order. (7) That Tribunal has no power to rectify decision on debatable point of law. (8) Whereas Courts having general jurisdiction like Civil Courts have inherent power, Tribunal docs not have power to review its own decision except what is authorised under section 254(2). (9) Whereas High Court has inherent power of review, in matter of Income-tax references even High Court cannot exercise that power. (10) decision on debatable point of law is not mistake apparent from record. (11) Where Tribunal has over-looked relevant material on record, there would be error apparent from record which can be rectified by setting aside order for fresh consideration. (12) That where material fact brought to notice of Tribunal has been lost sight of, Tribunal has power to rectify mistake so committed provided material fact has important bearing on ultimate decision. 17. In case of Mithalal Ashok Kumar (supra), Hon'ble Madhya Pradesh High Court has also held that non consideration of material, which are already available on record would constitute mistake apparent from record. Following observations made by Hon'ble MP High Court are pertinent :- 12 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. Thus, in present case, we are of opinion that Tribunal itself has found that it has committed certain mistakes in not considering material which was already on record which has effect of deciding appeal on merits. In present case, effect of rectifying its mistake, no doubt, has resulted in setting aside original order, but only question involved in this case was whether assessee-firm was genuine firm or not and in order to decide that point, if it felt that it had committed certain mistakes in not looking into material already on record, effect of error had been that it had to consider matter on that basis. Therefore, this cannot be said to be case of review in strict sense of term. Consequently, we are of opinion that Tribunal was right in refusing to make reference to this court as urged on behalf of Revenue because no question of law as such is involved, Tribunal admittedly having jurisdiction to rectify its own mistakes. 18. Identical view has been expressed by Hon'ble Allahabad High Court in case of ITO Vs. ITAT (supra), which has been referred to by Hon'ble Third Member. Hon'ble MP High Court has considered this question in yet another case named H.H. Maharaja Martant Singh Ju-Deo Vs.CIT (171 ITR 586) and it was held that Tribunal had recorded its earlier findings under misapprehension and misconception. Therefore when Tribunal corrected its earlier order, it has rightly exercised its power u/s. 254(2) of Act and same shall not constitute review of earlier order. In case before Hon ble Madhya Pradesh High Court, issue related to exemption claimed u/s 54 of Act. Tribunal held that house in question was owned by group of owners who constituted artificial juridical person, that considerable portion of property was in form of vacant land and there was no evidence to establish that floor area in occupation of assessee exceeded floor are in occupation of tenant. further question arise with regard to nature of capital gains, i.e., whether it is short term or long term. assessee filed miscellaneous application for rectification of mistakes. Tribunal deleted its entire findings and substituted them by stating that house was owned by Hindu Undivided Family consisting of assessee, his wife and son, that partition took place in 1971 whereby property was divided into three portions ,that considerable portion of property was not vacant land, gains arising on sale of house in nature of long term capital gains. When revision order passed by Tribunal was challenged, Hon ble High Court held as under:- 13 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. . In this state of affairs, there can be no manner of doubt that finding which had been recorded by Tribunal in its order dated December 8, 1981 and were subsequently deleted, had been so recorded under some misapprehension or misconception. By deleting these findings and substituting them by other findings as pointed out above, Tribunal has in substance endorsed findings recorded in this behalf by Income tax officer and Commissioner of Income tax, against which no appeal had been preferred by Department and correctness of which, as indicated above, was not challenged even by assessee in appeal preferred by him. It is, therefore, apparent that Tribunal had committed mistake apparent from record in recording findings in its order dated December 8, 1981, which were subsequently deleted and substituted by different findings as stated above. findings recorded under misapprehension or conception of facts are recorded as mistake apparent from record. 19. Mumbai Bench of ITAT has considered issue relating to mistake apparent from record in case of Shree Kismat Stone Supplying Co. Vs. ITO (Miscellaneous Application No. 64/Mumbai/2010 dated 30.4.2010). In above said case assessee was supplying stones, metal and other building material to builder named M/s Lok Grop. After prolonged litigation, assessee was allotted flat in partial discharge of amount payable to it. Revenue took stand that assessee has used borrowed funds for purchasing flat and accordingly disallowed proportionate interest expenditure. same was also confirmed by Tribunal. assessee filed Miscellaneous Application pointing out that flat was allotted towards partial discharge of outstanding amount and said fact was not considered by Tribunal. said plea of assessee was accepted by Tribunal and accordingly Tribunal also recorded finding that above said fact was not examined by it. Since relevant evidences available on 14 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. record were not considered by Tribunal, order passed by it was recalled. Similarly, in case of Rakesh Ramani Vs. ITO [(2006) 5 SOT 457] assessee filed Miscellaneous Application before Tribunal pointing out that Tribunal has not taken into consideration certain important documents filed by assessee and also it did not refer to certain case laws relied upon by assessee. Tribunal has considered plea of assessee and recalled order with following observations :- 7. principles of law as enunciated by various judgments of Hon'ble Courts relied upon by learned counsel for assessee, and other decisions are summarized as under: 1. That where there is wrong assumption of facts, it will constitute mistake apparent from record; 2. That where there is failure to consider certain evidence brought on record, it would also constitute mistake apparent from record; and 3. That where there is omission on part of ITAT to consider principles of law enunciated by decisions of various courts on which reliance is placed by assessee it will also constitute mistake apparent from record. In light of principles of law emerging from various decisions and provisions of law, if we examine facts of present case, we find that mistakes have occurred in Tribunal's appellate order dated 26-2-2003 as various facts and materials brought on record as referred to by learned counsel for assessee as mentioned in para 4.1 of miscellaneous application have not been considered by Tribunal while deciding appeal. It has been missed to be considered various principles of law enunciated by various decisions on which reliance was placed by learned counsel for assessee. Hon'ble Madhya Pradesh High Court in case of CIT v. ITAT(1988) 172 ITR 158 (MP) has held that "if point which is material for determining amount of tax so pressed; but not considered by Tribunal, it would certainly constitute mistake apparent from record within meaning of section 254(2) of Act". As such, considering all facts and circumstances of case as also legal position, we are of considered view that in instant case, there has inadvertently been non-consideration of vital facts, brought on record and judicial decisions, cited during arguments of appeal, which all go to root of matter and are so crucial as may even till balance of decision. Accordingly, in passing Tribunal's impugned appellate order, mistake apparent from record has occurred, rendering said appellate order of Tribunal liable to be rectified by essentially recalling same for passing fresh order in accordance with law after considering various facts on record as also judicial decisions cited by learned counsel for assessee-petitioner. On this view of ours, we are supported by decision of Hon'ble Madhya Pradesh High 15 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. Court in case of CIT v. Mithalal Ashok Kumar (1986) 158 ITR 755 (MP) wherein Hon'ble court has held "the direction for hearing of appeal did not amount to review in strict sense of term". We, therefore, set aside/recall Tribunal's appellate order dated 26-2-2003 and direct registry to fix related appeal for hearing so as to be decided afresh in accordance with law. 20. In case of Golden Meadows Properties Pvt. Ltd. Vs. ITO (149 Taxman 17)(Mum) also, Mumbai bench of Tribunal held that where there is failure to consider certain evidences brought on record, same would constitute mistake apparent from record. 21. Learned Departmental Representative also placed reliance on decision rendered by Hon'ble Rajasthan High Court in case of Champa Lal Chopra Vs. State of Rajasthan (257 ITR 74), wherein Hon'ble High Court explained scope of provisions of section 254(2) of Act as under :- 7. reading of Sub-section (2) of Section 254 of Act makes it clear that its scope and ambit is limited. It restricts to rectify mistakes apparent from record. Thus, in normal course, power of rectification cannot be extended for recalling entire order, obviously it would mean passing of fresh order. That does not appear to be legislative intent. However, in given case where factual mistake is so apparent that it becomes necessary to correct same, Tribunal would be justified in not only correcting said mistake by way of rectification but if judgment has proceeded on basis of that fact, it would be justified in recalling such order and posting for hearing. 8. Division Bench of Madhya Pradesh High Court in CIT v. Mithalal Ashok Kumar [1986] 158 ITR 755, Tribunal found apparent mistake from record in its order while deciding question as to whether firm was genuine or not, accordingly rectification was granted. On challenge by Revenue, Division Bench held that while considering application for rectification, provisions of Order 47, Rule 1 of Civil Procedure Code, can be strictly applied. judgment of Madhya Pradesh High Court is based on decisions of apex court in K.M. Shanmugam v. S. R. V. S. (P.) Ltd., AIR 1963 SC 1626 and Nagendra Nath Bora v. Commissioner of Hills Division, AIR 1958 SC 398. Division Bench confirmed order of Tribunal granting rectification, there being manifest error on face of proceedings. In recent decision Allahabad High Court in CIT v. U. P. Shoe Industries [1999] 235 ITR 663 has taken view that where there is apparent mistake from record, Tribunal has jurisdiction to rectify mistake by recalling entire order and posting for rehearing. 9. In instant case, Tribunal granted rectification and posted case for rehearing, having admitted that its order has proceeded on assumption of wrong facts. In our view, in facts of case, Tribunal was justified in 16 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. correcting manifest error. learned single judge has committed error in interfering with well justified order, without looking into real controversy involved. 22. Learned AR also placed reliance on decision rendered by Hon'ble Supreme Court in case of Honda Siel Power Products Ltd. Vs. CIT (295 ITR 466), wherein Hon'ble Supreme Court has observed that no party appearing before Tribunal suffers on account of mistake committed by Tribunal. 23. We notice that Courts/Tribunals have taken consistent view that non-consideration of vital materials available on record and/or findings recorded under misapprehension or misconception would constitute mistakes apparent from record warranting recall of order. 24. In instant case, submissions made by assessee shows that Tribunal has not considered certain important documents as detailed below:- (a) Pages 105A and 105B (as submitted in para 5 supra) (b) Pages 187 201 (as submitted in para 7 supra) (c) Pages 188-189 (as submitted in para 9 supra) Further, assessee has pointed out clerical mistake in computation and same is recorded in para 10 supra. Ld A.R submitted that Ld CIT(A) has compared purchase prices of diamonds purchased from sister concern as well as non-related party and accordingly given finding that difference in rate was to extent of Rs.72/- only. According to assessee, this vital fact as well as documents relating thereto have not been considered/addressed by Tribunal. Further it was submitted that Tribunal has omitted to consider fact that price of diamonds would depend upon its quality and size, even though specific observation was made accepting said fact. With regard to disallowance made out of labour charges, it was pointed out that documents relating to labourer and employee details were omitted to be considered by Tribunal. 17 M/s. Sanhvi Jewellery Manufacturing Co. Pvt. Ltd. 25. Thus, we notice that Tribunal has passed impugned order without considering certain important documents and without addressing important findings given by Ld CIT(A). We have seen that decision rendered without considering vital facts and documents available on record and upon misapprehension/misconception suffers from mistake apparent from record. Accordingly, we find merit in contentions of assessee that impugned order passed by Tribunal deserves recalling. Accordingly we recall impugned order dated 30-11-2011 passed by Tribunal in ITA No.352/Mum/2008 and ITA No.577/Mum/2008 and direct Registry to post these appeals for hearing afresh in normal course. 26. In result, both miscellaneous applications filed by assessee are allowed. Order has been pronounced in Open Court on 13.5.2016. Sd/- Sd/- (SANJAY GARG) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated : 13/5/2016 Copy of Order forwarded to : 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai PS M/s. Sanghvi Jewellery Manufacturing Co. Pvt. Ltd. v. ITO, Ward 8(3)(1)