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TMI Blog2012 (2) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal is squarely covered by Tribunal s orders, in assessee s own cases for the assessment year 2006-07 and 2007-08. While learned Departmental Representative 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 Hon ble Supreme Court in the case of Liberty India Vs CIT (317 ITR 218). We 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 with 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 assessee 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 ₹ 1,04,41,361. This interest was earned on fixed deposits placed with Bank of Nova Scotia, ICICI Bank and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nition, 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 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 then contends that coordinate bench decision in the case o Livingstone Jewellery (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 30th 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 Livingstone s case, which was dated 12th May 2009, learned Departmental Representative contended that later decision should be followed. 7. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference can be made to the Hon ble 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 Hon ble 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 Hon ble 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 Hon ble 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 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here 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 differ 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 Supreme 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 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 statute, 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 binding force. In Choudhry Bros case [1986] 158 ITR 224 , as noticed above, the Division Bench treated the judgment in Ch. Atchaiah s case [1979] 116 ITR 675, as per incuriam on the ground that the earlier Division Bench did not notice the significant changes the charging section 3 has undergone by the omission of the words or the partners of the firm or the members of the association individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 bench, 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 Hon ble 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 up. 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 (supra) 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 adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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