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TMI Blog2020 (8) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... ined that during the course of hearing, the Ld. DR, in the rejoinder pointed out two different workings given by the assessee and submitted that the figures of anticipated loss are not reliable. It is further stated that during the course of hearing it was explained that there did not exist any difference between the two workings but for the fact that the presentation of WIP in one working is with 'profit declared in the earlier years' whereas the other income is without considering such profit ; the Tribunal therefore, directed the assessee to file the profit chart and tax audit report of earlier years, which were submitted on the same day. It is stated that, however, the decision has been arrived at by the Tribunal against the assessee without considering the said explanation given in the rejoinder, holding that the workings filed by the assessee shows two different figures and hence not reliable. The Ld. counsels explains that the Tribunal, without considering explanation of the assessee, has observed in para 7 (on page 14) of the impugned order "we follow the ratio laid down in the above case laws relied on by the Ld. counsels. However, we find that the workings of total estim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich may be rectified u/s 254(2) in the interests of justice and equity. In this regard, reliance is placed by him on the decision in DCIT v. Manu P. Vyas (2013) 32 taxmann.com 176 (Guj) stating that in this case, as in the case of the assessee, certain issues were decided by the Tribunal without notice to the assessee and since in the proceedings taken u/s 254(2) of the Act, the order passed u/s 254(1) was recalled, the dispute was carried to the Hon'ble High Court by the Revenue ; in those proceedings, the Hon'ble High Court held that the Tribunal committed no error in exercising power of rectification. Similar reliance is placed by him on the decision in DCIT v. Rajendra M. Vyas (2013) 33 taxmann.com 345 (Guj) and Honda Siel Power Products Ltd. v. CIT 295 ITR 466 (SC). In view of the above, the Ld. counsel submits that the Tribunal may (a) recall the order dated 28.10.2019 and to list it for hearing and disposal in accordance with law ; and/or (b) pass any other order and/or direction as this Tribunal may deem fit and proper in the facts and circumstances of the case. II 3. On the other hand, the Ld. Departmental Representative (DR) submits that the matching principle require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l AY 2012-13, as the net result from the project was a loss and it had correctly followed the principles laid down in the Guidance Note. As per the said Guidance Note, if there were future expected losses, i.e. when the probable costs are likely to exceed the probable revenues, then in such a case, the estimated losses should be immediately recognized not waiting for the actual losses to occur. Such losses can also be recognized which are likely to be incurred, due to revision in the estimates, which principle the assessee has rightly followed, while ascertaining the profitability for the year under appeal. It was thus stated that the said Guidance Note clearly lays down the criteria that the estimates can be revised subsequently and the revenues previously recognized can be reversed due to such revision in estimates. Referring to para 5.9 of the said Guidance Note i.e. 'the changes to estimates referred to in paragraph 5.8 above also include changes arising out of cancellation of contracts ...", it was explained that the said words signify that cancellation of contracts and others are included and that by itself does not infer, only in such cases the estimates can be revised as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue, expenses and profit that can be attributed to the proportion of work completed, (iv) this method provides useful information on the extent of contract activity and performance during a period, (v) contract revenue is recognized as revenue in the statement of profit and loss in the accounting periods in which the work is performed, (vi) contract costs are usually recognized as an expense in the statement of profit and loss in the accounting periods in which the work to which they relate is performed, (vii) however, any expected excess of total contract costs over total contract revenue is recognized as an expense immediately. The year-wise details of profit declared on the project "S.S. House" filed by the assessee are giving below : Sr. No. A.Y. Profit declared (Rs.) 1. 2010-11 Rs. 2,65,93,359/- 2. 2011-12 Rs. 1,95,32,020/- 3. 2012-13 Rs. 2,19,87,786/- Total Rs. 6,81,13,165/- A perusal of the WIP account for the year ended 31.03.2014 shows that the WIP was shown at Rs. 97,88,86,048/- and from the same the above amount of Rs. 6,81,13,165/- was reduced on account of 'reversal of profits declared in the earlier years on account of estimated loss expect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofits as on 31.03.2014 of the project "S.S. House". The Ld. DR also filed an working of total estimated profits as on 31.03.2014 of the project "S.S. House" given by the Ld. counsel to him. Those details have been reproduced at para 7.5 & 7.5.1 of the impugned order. We have clearly mentioned that the percentage of completion would be estimated by comparing total cost incurred to date with total cost expected for the entire contract and we have given an illustration at para 7.6.1 in the impugned order. On the basis of the above facts, it has been clearly stated in the impugned order that an examination of the working of total estimated loss on the project "S.S. House" as worked out by the assessee clearly indicates that it suffers from basic deficiencies viz. (i) total cost incurred till 31/03/2014 Rs. 91,07,85,390/ or Rs. 978,886,048/- is not a reliable one, as the assessee is sticking to two figures, without supporting computation, and (ii) total estimated loss of Rs. 3,95,51,736/- or Rs. 108,431,736/- is not a reliable one, as the assessee is sticking to two figures, without supporting computation, (iii) there is no prudent estimate of additional cost for completion of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the duty of the Tribunal to set it right. Atonement to the wronged party by the Court or Tribunal for the wrong committed by it has nothing to do with the concept of inherent power to review. In the present case, the Tribunal was justified in exercising its powers under s. 254(2) when it was pointed out to the Tribunal that the decision of the co-ordinate Bench was placed before the Tribunal when the original order came to be passed but it had committed a mistake in not considering the material which was already on record. The Tribunal has acknowledged its mistake, it has accordingly rectified its order. The High Court was not justified in interfering with the said order. For the aforestated reasons, the impugned judgment of the High Court is set aside and the order passed by the Tribunal allowing the rectification application filed by the assessee is restored." In the instant case, we have duly considered, in the impugned order, the decisions relied on by the Ld. counsel in CIT v. Virtual Soft Systems Ltd. (2018) 404 ITR 409 (SC), ACIT v. M/s ITD Cementation India Ltd. (ITA No. 3669/Mum/2011 for AY 2004-05 by ITAT, Mumbai), Dredging international N.V. v. ADIT (2011) 48 sot 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. This view is supported by the decision of the Hon'ble Supreme Court in T.S. Balaram, ITO v. Volkart Bros., (1971) 82 ITR 50 (SC), Master Construction Co. P. Ltd. v. State of Orissa, AIR 1966 SC 1047, Karam Chand Thapar & Bros. (Coal Sales) Ltd. v. State of U.P. (1976) Tax LR 1921, 1927 (SC) and CCE v. ASCU Ltd., (2003) 9 SCC 230, 232. We may refer here to the decision in ACIT v. Saurastra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC), wherein the Hon'ble Supreme Court relying on its decision in Patel Narshi Thakershi & Ors. vs. Pradyumansinghji Arjunsinghji (1971) 3 SCC 844, Hari Vishnu Kamath vs. Syed Ahmad Ishaque (1955) 1 SCR 1104, Satyanarayan Laxminarayan Hegde & Ors. vs. Mallikarjun Bhavanappa Tirumale (1960) 1 SCR 890 and Syed Yakoob vs. K.S. Radhakrishnan & Ors. (1964) 5 SCR 64A held that : "Patent, manifest and self-evident error which does not require elaborate discussion of evidence or argument to establish it, can be said to be an error apparent on the face of the record and can be corrected while ..... X X X X Extracts X X X X X X X X Extracts X X X X
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