Powers under section 254(2) cannot be exercised for reviewing a considered and conscious decision on grounds which are inherently subjective and capable of debate and discussion on adoption of one view or the other

The powers under section 254(2) can only be exercised when it is found that there is a mistake in the order of the Tribunal and the mistake is such that no two views are possible.

CASE LAWS DETAILS

DECIDED BY: ITAT, MUMBAI `I’ BENCH, MUMBAI, IN THE CASE OF: Equest India Private Limited v. DCIT, APPEAL NO: MA No. 734/Mum.08, DECIDED ON May 31, 2010

FACTS

These three miscellaneous applications seek rectification of certain mistakes apparent on record said to have crept in the consolidated order Equest India Pvt Ltd MAs for AY1998-99 to 2000-01 dated 27th March 2007 passed by us for the assessment years 1998-99, 1999-2000 and 2000-01. The mistake pointed out in all these miscellaneous applications is the same with regard to all these years. As a matter of convenience, therefore, we take up all these three miscellaneous applications together for disposal by way of this common order.

HELD

There is thus no such mistake as may be apparent on record, even if there be one, which can be said to be apparent on record and on which two views are possible. The powers under section 254 (2) can only be exercised when it is found that there is a mistake in the order of the Tribunal and the mistake is such that no two views are possible on the same. The powers under section 254(2) cannot be exercised for reviewing a considered and conscious decision on the grounds which are inherently subjective and capable of debate and discussion on adoption of one view or the other.

RELEVANT PARAGRAPHS

6. We have noted that the main finding of the Tribunal in this case was that the “business activity of the assessee is to own and maintain the race horses, since dominant purpose of all his activities is to acquire and maintain the race horses” and that “the activity of leasing mares for breeding, entering into lease options and all other activities are wholly incidental to the main activity of owning and maintaining the race horses”. It was in this context that we noted assessee’s inability to cite one example of foals or fillies with good potential in the racecourse. We were of the view that in case someone’s business is breeding horses for commercial gains, it would make commercial sense to sell horses with good race potential as well, and since there was no evidence to indicate that, we inferred that it is not the predominant activity of the assessee to breed the horses but to own and maintain the race horses. At this stage, we are not concerned, nor are we allowed to be concerned, whether this finding is free from doubt or not or whether the conclusion so arrived at was capable of another view being taken at or not; all that we have to see is that whether this finding is vitiated by a mistake apparent on record.

7. The case of the assessee is that since the foals and fillies were sold in the relevant period and these foals and fillies were of the age of being on the race course, it could not be said that these are racing discards. The fact, however, remains that there is, and there was, nothing on the record to suggest that any of these foals or fillies so sold had good potential on the race course, and the learned counsel appearing before us at the time of original hearing expressed his inability to establish that either.

8. Just because foals or fillies sold by the assessee were of age good enough to participate in the races does not necessarily mean that they Equest India Pvt Ltd MAs for AY1998-99 to 2000-01 were doing well in the racecourse or had a good potential in the racecourse. A race discard, in any event, does not mean only that the horse is not of age to be in the racecourse, it will as well include the horses which are old enough to be in the racecourse but not good enough in the races. The sale of foals and fillies, as pointed out in the miscellaneous applications, does not disturb the finding of fact arrived at by the Tribunal regarding nature of business carried on by the assessee. The finding of the Tribunal is that, taking into account all these factors as discussed in the order at length, the “business activity of the assessee is to own and maintain the race horses, since dominant purpose of all his activities is to acquire and maintain the race horses” and that “the activity of leasing mares for breeding, entering into lease options and all other activities are wholly incidental to the main activity of owning and maintaining the race horses”.

9. There is thus no such mistake as may be apparent on record, even if there be one, which can be said to be apparent on record and on which two views are possible. The powers under section 254 (2) can only be exercised when it is found that there is a mistake in the order of the Tribunal and the mistake is such that no two views are possible on the same. The powers under section 254(2) cannot be exercised for reviewing a considered and conscious decision on the grounds which are inherently subjective and capable of debate and discussion on adoption of one view or the other.

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